May 23, 2024 | 8 Factors to Establish “Bad Faith” by the Applicant in Filing a Trademark Application:

1 It is common to oppose the registration of a trademark application on the grounds of “dishonest use” in the Opposition proceeding.

2 According to section 11(5)(b) of the Trade Marks Ordinance, Cap. 559, the Intellectual Property Department may refuse the applicant’s trademark application based on the following reasons: the applicant made the trademark application in bad faith.

3 In this article, the author intends to analyze, through a recent case (issued on February 9, 2024), factors which the Intellectual Property Department considers and adjudicates on in what constitutes “bad faith”.

「骨捷靈」vs「強力骨捷靈」

4 On November 16, 2023, the Intellectual Property Department conducted a hearing and made a decision regarding the applicant’s trademark application for “骨捷靈”. Although the opponent raised multiple opposition grounds against the applicant’s trademark application, the author will focus on one significant opposition ground – the detailed consideration of the claim of “bad faith”.

5 In the subject case, the opponent claimed that it had filed a trademark registration application for “強力骨捷靈” in the same class of goods (i.e., pharmaceutical preparations) in Hong Kong prior to February 2010. The opponent further submitted evidence of its registration with the Hong Kong Department of Health on June 30, 2004. Since “強力骨捷靈” and “骨捷靈” are highly similar trademarks, the opponent argued that consumers are likely to be confused and/or deceived. Additionally, the opponent had been using “強力骨捷靈” for a long time, leading them to believe that the applicant intentionally emulated the opponent’s trademark and filed the trademark application in “bad faith”.

6 As expected, the applicant opposed the opponent’s claims. The applicant submitted an investigation report covering all 18 districts in Hong Kong to the Intellectual Property Office. The report indicated that out of 90 interviewed practitioners, none of them were familiar with or had heard of the opponent’s “強力骨捷靈”. Furthermore, the applicant pointed out that it holds registrations for 8 homophonic trademarks “骨節靈” (with the earliest registration dating back to October 8, 2004). The applicant’s subsidiary also registered the product under the name “骨節靈” with the Chinese Medicine Practitioners Board of the Department of Health on May 24, 2005. As a result, the opponent’s claims of “bad faith” were challenged.

Opponent’s opposition fail

7 After considering the evidence from both the opponent and the applicant, the Intellectual Property Department favoured the applicant’s evidence and ruled that the opponent’s opposition failed.

8 When making the ruling, the Intellectual Property Department cited the 8 major factors outlined by Justice Lok in the judgment of Red Bull GMBH v Sun Mark Limited and Sea Air & Land Forwarding Limited (2013) ETMR 53.

8 major factors

9 In considering whether or not the applicant filed his trademark application in “bad faith”, the High Court of Hong Kong and the Intellectual Property Department will use the below 8 major factors in determining whether or not the application was made in “good faith” or in “bad faith”:-

9.1 Whether or not the application was made in “bad faith” because of the date of the application.

9.2 Although the relevant date is the date of the trademark application, evidence after the relevant date will also need to be considered to reflect the applicant’s situation at the time of application.

9.3 Unless the opponent’s evidence proves otherwise, it should be presumed that the applicant acted in good faith.

9.4 “Bad faith” encompasses not only dishonest conduct but also whether or not their conduct does not confirm with “conduct that meets industry standards and is considered standard by experienced professionals” (generally referred to as “industry practices”).
9.5 Refusing “bad faith” trademark applications is aimed at preventing the abuse of the trademark system.

9.6 A comprehensive evaluation must be conducted, considering factors specific to individual cases.

9.7 The applicant’s level of knowledge regarding the relevant applied-for trademark must be determined first, and based on the applicant’s knowledge, the applicant’s behavior is judged against the general standard of sincerity.

9.8 The applicant’s intent.

Assumption of the applicant’s good faith

10 Among the 8 major factors mentioned above, the importance of the third factor (paragraph 9.3) is heavily emphasized. The Court is inclined to lean towards accepting the assumption that the applicant acted in good faith as a fundamental premise (assumption). Therefore, for the opponent, it becomes essential to present strong evidence to overturn this assumption. If the opponent’s evidence is weak, the applicant may prevail even without presenting any evidence. If the opponent can provide some degree of compelling evidence, then it is on the burden of the applicant to disprove that evidence. It is more practical to use “industry practices” as the standard to provide evidence. The Intellectual Property Department will then consider the evidence of both parties and make a final judgment based on the 8 major factors above when determining whether an applicant makes the application in “bad faith” when filing a trademark application:

11 In the trademark opposition process, it is common to challenge a trademark application on the grounds of the applicant’s lack of sincerity. It is common for cross-examination to occur, but the opponent must make an application for cross-examination at an appropriate time before the hearing.